New Company formation

[northernladuk]

So the splitting the shares with my wife is simply a judgement call on if she is likely to divorce me anytime soon lol. Well thats going to be an awkward conversation

And everyone assumes not but we have had threads on here from a couple of people asking what to do with their split company when they got divorced. They didn't think it would happen either.

[dx4100]

For sure... Its a valid point. Cheers

[dx4100]

Opened a new company today... Still considering the pros and cons of adding my wife and gifting her the shares before I start trading...

If we do this - anyone know where this leaves me in regards to IPSE tax investigation cover. Would we both need the cover or will be ok just me keeping it.

[jamesbrown]

So the splitting the shares with my wife is simply a judgement call on if she is likely to divorce me anytime soon lol. Well thats going to be an awkward conversation

As an icebreaker, you could start by asking her whether she's going to divorce you anytime soon.

[dx4100]

As an icebreaker, you could start by asking her whether she's going to divorce you anytime soon.

She promised she wouldn't.... She also promised me she wouldn't wash my white shirt with pink socks and that didn't end well either...

[edison]

I started off with a 70/30 shares split and after about 4 years, changed it to 60/40.

Statistically around one in two marriages end in divorce so it is something that needs to be considered in your planning unfortunately.

[dx4100]

The divorce issue is relevant but also a personal one. In the end if we got divorced its 50/50 anyway so whatever I suppose. Just split the money and open a new LTD. Also need a share agreement giving the company the right to buy back the shares in the event of death.

For the sake of anyone who comes across this thread the answer to my question was.... If your partner is just doing admin and not billable work then you only need the one IPSE membership to cover a tax investigation. Makes sense but good to confirm.

[Craig@Clarity]

The divorce issue is relevant but also a personal one. In the end if we got divorced its 50/50 anyway so whatever I suppose.

I don't think it is. If you were sole director and shareholder, then the company funds are not 50:50 in a divorce. It may have bearing on child maintenance if you have kids but in terms of divvying up your financial assets, I don't think they count it. Double check with a solicitor but based on cases I've dealt with, I've not seen a solely owned company being included as part of the settlement.

[northernladuk]

I don't think it is. If you were sole director and shareholder, then the company funds are not 50:50 in a divorce. It may have bearing on child maintenance if you have kids but in terms of divvying up your financial assets, I don't think they count it. Double check with a solicitor but based on cases I've dealt with, I've not seen a solely owned company being included as part of the settlement.

Aren't his shares an asset so effectively the whole company is included in the settlement?

[Craig@Clarity]

Aren't his shares an asset so effectively the whole company is included in the settlement?

Asset yes but I've not seen it included as part of a financial settlement. If you're looking at it as a one-man band, I can see your point but I don't think the courts would paint all cases with that same brush.

What if the shareholder was working in partnership with one/two/three other shareholders which didn't include the spouse? That "asset" cannot be valued as it is a mechanism for receiving dividends and possibly capital upon winding up. If the directors don't declare any dividends or have no intention of winding up, what is that "asset" worth in a settlement? You can't put an agreed value on it.

Imagine what it means if you hold shares in British Gas and you get divorced. Would you have to include a percentage of British Gas's valuation as part of the assessment?! That would be mental IMO.